CHAPTER 4

• Business risk is the possibility that the business may not be able to generate sufficient revenue
• Compliance risk - the risk that the company might fall to comply with applicable laws, regulations, and contractual obligations to other entities.
• Credit risk the risk that a counter-party such as a customer or a borrower will fail to pay his/her account on the due date.
• Enterprise Risk Management a process effected by an entity's board of directors, management, and other personnel;
• Environmental risk - the risk that the company may fail to control or minimize factory wastes, emissions, and other pollutants arising from its business activities.
• Financial reporting - the possibility that the financial statements of the company will be incorrect due to errors, lapses, or failure to apply accounting standards.
• Financial risk - the likelihood that the company might incur a financial loss, or suffer a decline in profit, capital, investment, or cash flows on account of the occurrence of events or transactions.
• Foreign currency risk - the that fluctuations in exchange rates will the profit of the business.

  Fraud risk the risk arising from intentional and deceptive acts that result to loss of company assets, resources, and reputation.
• Health and safety risk is the risk that unforeseen events could result in injuries, illnesses, or even loss of lives.
• Impact is the significance or magnitude of the risk on its effect to the company.
• Operational risk - the risk that business operations will be disrupted due to inadequate or erailed systems, processes, people, breaches in internal controls, or other unforeseen catastrophes.
• Interest rate risk is the potential decline in earnings and capital arising from changes in interest rates in the market.
• Reputational risk- the risk that reputation or image of the company will be damaged due to reasons such as improper acts of corporate officers, poor performance, and bad news about the company among others.
• Liquidity risk is the risk that the business would be unable to meet its financial obligations as they fall because insufficient cash and inability to liquidate assets or obtain adequate funding on short notice.
• Risk appetite - the level of risk that the company can accept in pursuit of its objectives
• Likelihood is the probability that the event will occur.
• Risk identification - the process of identifying risks that can prevent the business objectives of the company.
• International Financial Reporting Standards (IFRS) is a set of internationally accepted accounting standards intended to promote quality and transparent financial reporting.
• Risk response - the process of selecting the appropriate risk response or action based on the result of the risk assessment.
• Strategic risk - the risk of selecting an inappropriate corporate strategy or the failure of implementing an appropriate one.
• Risk assessment - the process of analyzing the identified risks in terms of "likelihood" and "impact."
• Risk - the possibility that an event will occur and adversely affect the achievement of enterprise objectives.
• Price risk - the risk that changes in specific prices stock price, price of other investments) could affect the profit or cash flow of the business.